Utah execs' optimism waned in Q4, but they stay positive

Utah execs' optimism waned in Q4, but they stay positive
Economy » Business leaders are guarded, but some see signs of recovery

By Paul Beebe, The Salt Lake Tribune
Updated: 03/13/2009 04:22:22 PM MDT

Optimism among Utah executives about the financial futures of their companies is ebbing, but has not collapsed, despite declining economic conditions in the country.

"Lets call it guarded. Nothing has fallen off the cliff," said Julie Olsen, a research analyst for Dan Jones and Associates, which produced the latest quarterly economic forecast for Zions Bank.

"Because of everything you hear going on in the media, you have to be blind not to know that something is going on, but people are not ready to throw in the towel," Olsen said.

The study tries to gauge the health of Utah's economy from the perspective of high-level executives across the state. Their optimism about the future of their firms was measured at 5.86 in the last quarter of 2008, down from 6.13 in the third quarter. Optimism is measured on a scale of 1 to 10.

Olsen said respondents impart several meanings to "financial future." The term could mean anticipated earnings, financial stability or cash flow, among other things.

The U.S. economy is in the 15th month of a recession that shows no sign yet of recovery. In Utah, business conditions have weakened considerably, but are healthier than much of the country.

In fact, some businesses even sense that the worst may be over.

"I am sensing in the daily activity we are getting reasonably close to where things are flattening out," said W. David Smith, general manager of the Salt Lake division of XpedX, a
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wholesale distributor of paper, packaging and facilities maintenance supplies.

"I just see that in the requests for quotes and deliveries going out. It's not at the levels that we would like and certainly down compared to levels a year ago. But it looks like the trend is flattening and not trending down," Smith said.

Still, the survey shows executives are cautious about prospects for their companies in coming months.

Capital spending weakened further in the fourth quarter. Just 10 percent of respondents said their spending on equipment and other assets increased in the final three months of last year, marking the lowest level since the survey began in mid-2006, and down from 17 percent in the third quarter.

Utah executives were more pessimistic about hiring in the fourth quarter than at any time before. Thirty seven percent said employment was likely to decrease in the quarter, up from 26 percent in the previous three months of last year.

pbeebe@sltrib.com

Salt Lake convention business strong despite recession

Salt Lake convention business strong despite recession
Bookings » 2008 was second-best year ever, though downturn's effects are being felt.

By Mike Gorrell, The Salt Lake Tribune
Updated:03/11/2009 08:17:23 AM MDT


This is a big year for the Salt Lake Convention & Visitors Bureau.

It's celebrating its silver anniversary, 25 years of marked growth that includes a prominent supporting role in securing and staging the 2002 Winter Olympics.

But like everyone else, the bureau is trying to withstand the onslaught of the recession -- something it has been able to do thus far.

Its prospects of continuing to do so will be enhanced greatly if it succeeds this July in impressing thousands of visitors from Meeting Professionals International (MPI), the people who decide where companies, groups and trade associations hold their future conventions.

Collectively, those meetings generate $14 billion worth of spending each year. With a good showing July 11-14, the Salt Lake CVB hopes to increase its share of the national meeting market beyond the $243.6 million worth of business brought in last year.

"This is a great opportunity to bring the best and the brightest of our industry here and to show them what we are and what we're becoming," said Bureau President Scott Beck, citing ongoing construction projects that are reshaping downtown Salt Lake City. "I'm always amazed by the looks on people's faces when we go to the 16th floor of the Marriott hotel and show them what's going on."

At the bureau's annual meeting Tuesday night, Beck said 2008 was the second-best year ever for booking future hotel-filling meetings, surpassed only by the year when rooms were secured for the Olympics.

The CVB staff booked meetings that, in total, are projected to produce visitor spending of nearly $325 million, he said.

Efforts to promote skiing at Salt Lake County's four resorts -- Alta, Snowbird, Brighton and Solitude -- also grew last winter. The bureau sold $3.2 million of "Superpasses," good at each of the four, a 2.5 percent increase over the previous year.

Free publicity about Salt Lake-based skiing in national publications also increased 95 percent, Beck said.

But there is no doubt, he acknowledged, that the recession is making everyone antsy. Attendance at events is down -- last month's Outdoor Retailer Winter Market slipped 5 percent from 2008 -- and Salt Lake City will face more competition for future bookings from convention-city heavyweights such as Las Vegas.

MPI President Bruce MacMillan, in town to address the bureau meeting, said he believes Salt Lake City is well positioned to flourish in this age of heightened competition.

"The [Salt Palace] convention center is fabulous. You have the hotels. Any city that can host the Olympics and that has put money into the infrastructure will do well," he said. "Strong meeting and event destinations will get stronger, and those on the periphery will fall away. You can't just be good. You have to be great."

MacMillan also emphasized that government officials and politicians should stop criticizing companies for holding meetings in the wake of government bailouts, contending these gatherings spur innovation within the assembled groups and create legacies for the communities in which they are held.

"Making it harder for people to get together is not the answer" to the current economic problems, he said. "Keeping your eye on the long term is the way to go."

mikeg@sltrib.com


2008 total visitor spending

Visitors of all types -- from skiers and conventioneers to tourists in cars and buses -- spent nearly $1 billion in Salt Lake County last year.
At hotels » $348 million
To rent cars » $134 million
At restaurants » $238 million
In retail shops » $232 million
Total » $952 million
Sales taxes generated » $99 million

2008 meetings and conventions
The Salt Lake Convention & Visitors Bureau reported solid financial results from meetings last year:
Delegates » 273,974
Hotel room nights » 329,698
Delegate spending » $243.6 million
Sales and use tax revenues
State » $10.5 million
Salt Lake County » $8.9 million
Cities in county » $2.4 million

Sportsmen's Expo set in Sandy
Hundreds of exhibitors will be on hand at South Towne Exposition Center from Thursday through Sunday for the 11th annual Utah International Sportsmen's Exposition.

Decreased Workforces, Expenditures Predicted by Utah Execs in Latest Zions Bank Quarterly Economic Forecast

UtahPulse.com
March 10, 2009

As optimism for their financial future continues to decline, more Utah executives are predicting decreases in their workforces and fewer capital expenditures, according to Zions Bank's Utah Quarterly Economic Forecast. More panelists than ever anticipate the economic health of their companies will be weaker in the future, according to the bank's fourth quarter 2008 survey results.

Conducted by independent research firm, Dan Jones & Associates, the survey has gauged the health of Utah's economy from the perspective of high-level executives throughout the state since second quarter 2006.

Executives' optimism regarding the financial futures of their companies based on the previous quarter has declined from a mean score of 7.87 two-and-a-half-years ago to the fourth quarter 2008 rank of 5.86 on a scale of 1-10, with 1 being very pessimistic and 10 being very optimistic. The latest survey, conducted January 5 through 27, reveals that just one in 10 Utah executives rate their outlook as a 9 or 10, down from one-third in the second quarter 2006.

"Even with this harbinger of hard times ahead, Utah executives report less concern, collectively, about individual economic factors," said Pat Jones, co-owner of Dan Jones & Associates. "In fact, of the 11 economic factors measured by executives each quarter, only two reach their highest level of concern in the current quarter, and six are actually at their lowest levels of intensity."

The full 30-page report of the fourth quarter 2009 Zions Bank Utah Quarterly Economic Forecast can be viewed here. Following are additional highlights from the latest study:

* Over the two-and-a-half-year period of the study, predictions for their companies' economic health in the upcoming quarter have steadily fallen. In the summer of 2006, half of the panelists thought the economic health of their companies would improve. Now less than one in five panelists think so.
* Anticipated capital spending in the next quarter is down by a similar margin: from 30 percent predicting somewhat or much more spending to 10 percent today.
* Utah business executives are now more likely than in any previous quarter to say they foresee their workforces decreasing somewhat or greatly in the next quarter, up from nine percent two-and-half years ago to 37 percent now.
* Seemingly more focused on the economic "big picture," executives are less concerned about individual economic factors than they have been throughout the course of this study. Each quarter 11 economic factors are measured on a 7-point scale, with 1 being not at all concerned to 7 being very concerned.
* Just two factors reach their highest levels of concern this quarter: first, the ability to compete in the marketplace, with almost one-quarter saying they are greatly concerned (the previous high was 19 percent in the second quarter 2008); and second, the cost of the lease, rent, or mortgage up to 10 percent from the previous high of 8 percent in the third quarter of 2008.
* Concern for the majority of the economic factors is currently at its lowest level. The cost of employee health insurance--the number one concern this quarter--is down from its previous high of 63 percent in the third quarter of 2007 to 48 percent today.

In 2006, 1,169 business executives were recruited to form the study panel and to complete quarterly surveys. Business owners and high-level executives are still needed to join the panel and share their confidential views on the economy. Those interested in joining the panel may learn more information at https://utaheconomicforecast.com.

Index points to tough times for Utah small businesses

Index points to tough times for Utah small businesses

By Jasen Lee, Deseret News
Published: March 10, 2009

An indicator of Utah's small-business strength continued to show weakness in February.

The Zions Bank Small Business Index for Utah was 68.0 in February 2009, up from a revised 65.5 in January 2009, according to a news release.

Despite the slight uptick, the index — initiated in 1990 — still hovered in record-low territory.

"The last two months in the 60s is the lowest its been since we've been doing it," said Kendal Oliphant, senior vice president of Salt Lake City-based Thredgold Economic Associates, which compiles the data for the index.

The index measures business conditions in Utah from the perspective of the small-business owner or manager. A lower index number depicts less favorable business conditions for Utah's small businesses, using 100.0 for calendar year 1997 as its base year.

"In terms of Utah, there is probably more pain coming," Oliphant said. "We were kind of slow to jump on the recession bandwagon, but now Utah is in a full-fledged recession."

The current U.S. recession, already 15 months in duration, is likely to continue throughout most of 2009, negatively impacting Utah's small-business sector, the report said.

Utah's unemployment rate was estimated at 4 percent in the latest month, up from the prior month's revised 4.1 percent rate, Oliphant said. Utah lost an estimated 20,400 jobs during the past 12 months, he said.

Nationally, the economy lost an estimated 651,000 net jobs in February, matching economists' expectations, according to the report. The U.S. unemployment rate rose to a 25-year high of 8.1 percent.

U.S. and global economic performances are components of the Small Business Index for Utah. As a result, weaker performances for both economies contributes to a lower index measure, the release stated.

Oliphant said the nation is expected to pull out of the recession by the end of this year. As for Utah, he predicts the Beehive State will probably follow suit "once the U.S. returns to positive growth."

But that growth will likely not come before the state feels even more job loss pain, Oliphant said.

"We expect unemployment to continue to rise even into next year in the U.S.," he said. "Utah is going to see the same pattern."

It will likely be some time next year before Utah begins to experience job growth again, Oliphant said.

"Small-business conditions are very tough in Utah right now," he said.

E-MAIL: jlee@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Quirky liquor laws hurt economic development

Quirky liquor laws hurt economic development
Reform » Utah real-estate group wants restrictions eased

By Dawn House, The Salt Lake Tribune
Updated:03/06/2009 08:53:26 AM MST


Commercial real-estate professionals are making a last-minute appeal to state lawmakers to ease quirky liquor laws they say are hampering economic development in Utah.

The plea from Real Estate Professionals for Economic Growth, representing 95 percent of all commercial real-estate transactions in Utah, came in a letter sent to all members of the House and Senate, where legislation is being considered to do away with Utah's private club law.

The group points to two studies showing that the state's peculiar liquor laws are a roadblock to corporate leaders looking to relocate or expand in Utah.

The research, conducted in 2005 and 2006, was completed when the economy was "white hot two short years ago. Given the current economic climate we now face, we see it as even more urgent," said the letter signed by the group's president, William Martin.

"Even simple moves to make our liquor laws less quirky can go a long way to improving our image," said Martin. "People don't seem to be willing to face the issue of making logical changes to our laws and concentrate instead on enforcing laws dealing with alcohol abuse."

The group supports Gov. Jon Huntsman Jr. in his push to abolish private membership fees people must pay in Utah before they can buy a drink in a what other states consider a public bar.

The governor's spokeswoman, Lisa Roskelly, said Huntsman's "ongoing efforts to normalize Utah's liquor policy has a direct correlation to economic development, which is a critical issue in these economic times."

Corporate executives interviewed in the study said that every state had its own peculiarities. But no other perception was as distinct or distinguishable as was Utah's. The most dominant perception is that The Church of Jesus Christ of Latter-day Saints wields influence over state affairs; the second was Utah's "unusual liquor laws."

One respondent said that although Utah's liquor laws aren't too complicated, "they give the state a weird reputation" that "plays to the whole uptight image."

Said another: "It's not that it's that much harder to get a drink in Utah, there is just something weird about knowing people don't want you to have one."

The research included hundreds of individual and group interviews published in the book entitled Choosing Utah.

Hyatt enters Utah market

Hyatt enters Utah market

By Mike Gorrell, The Salt Lake Tribune
Updated:03/06/2009 08:27:56 PM MST


Absent from Utah's hotel scene until now, the Hyatt brand is establishing a presence in three diverse areas of the Salt Lake Valley.

A Hyatt Summerfield Suites opened in November in Sandy, positioned so its 137 suites will appeal to destination visitors skiing in the Cottonwood canyons and business people with south valley clients.

Joining downtown's cluster of hotels this summer will be a 128-room Hyatt Place Hotel at 55 N. 400 West, the overnight lodging component of The Gateway development.

Another Hyatt Place is scheduled to open this fall at 52 N. Tommy Thompson Road (4700 West) in the growing group of hotels near Salt Lake City International Airport.

Why now, after not being Utah for so long?

"For lack of a better description, the stars just aligned right with the right developers," said Jim Chu, Hyatt senior vice president of franchise and owner relations. He and other Hyatt-affiliated hoteliers met this week at the Sandy Hyatt Summerfield.

"There's no particular reason the brand wasn't in Salt Lake before," he said. "It's not that we didn't want to be. We just didn't have the right opportunity for the right project at the right time."

But now, hard as the economic times might be, turns out to be that right time.

Kevin Ludlow, the Hyatt franchisee whose company owns the 30-employee Sandy hotel, is not surprised.

"Small business can still succeed in a down economy," said Ludlow, owner of Sequoia Development, which pays Hyatt a royalty to use its name. "It's still the engine that makes things work. The hospitality business has taken a hit, but we've got to believe small business is important and can make it in tough times."

Chu said Hyatt believes it has solid partners in the Salt Lake Valley projects.

Sequoia Development has worked on commercial real estate, resort condominiums at Deer Valley and gated community projects for two decades. The Gateway Hyatt is being built by The Boyer Co. and the Gardner Co., while the airport Hyatt Place is part of the Commonwealth Hotels chain.

Commonwealth is part of Corporex Cos., LLC, a Kentucky real estate company with $1.1 billion in assets. Those include 23 hotels in 11 states and another 10 hotels in development, including a Springhill Suites by Marriott in South Jordan.

Chu said these partners "know the Salt Lake City market and the success it's had in years past … It has had consistent performance. It hasn't gone through the big explosion of growth in new hotels over the last five to seven years, so market demand has stayed ahead of the supply curve."

In addition, Utah's overall economy is more upbeat than most states. "Even in today's environment, it's a bit more stable than most other markets. There's been a bit of insulation from the general severity of the economy," he said.

One advantage of bearing the Hyatt name is inclusion in a reservations and promotional system for 370 hotels worldwide, Chu said. Four new hotels were added last month.

mikeg@sltrib.com